Dealers rejoice as car sales soar

Tom Cleary and Robert Miller

Published 11:27 pm, Friday, January 4, 2013

A new Mustang sits on the lot with other new vehicles for sale at Park City Ford in Bridgeport, Conn. on Friday January 4, 2013. American care sales overall in 2012 have seen the best increase in five years.
Photo: Christian Abraham

Park City Ford President David J. Flint poses in his office at the dealership in Bridgeport, Conn. on Friday January 4, 2013. American care sales overall in 2012 have seen the best increase in five years.
Photo: Christian Abraham

A new Ford Focus sits in the showroom with other new vehicles for sale at Park City Ford in Bridgeport, Conn. on Friday January 4, 2013. American care sales overall in 2012 have seen the best increase in five years.
Photo: Christian Abraham

With aging cars in their driveways, more efficient vehicles in showrooms and a little more cash in their pockets, Americans bought more cars in 2012 than any year since the economy collapsed in 2008.

"The glass is finally more than half full," said David Flint, president of Park City Ford in Bridgeport. "From 1991 to 2007, U.S. total sales were improving each year. We were selling more than 15 million every year for awhile. But since the crash in 2008, we've never been close to that."

Carmarkers this week released their final figures for 2012, which totaled 14.5 million sales, a 13 percent increase over 2011.

Five years after the crash, Americans had a lot of incentive to get out and buy a new car.

Unemployment eased. Home sales and prices rose. And the average age of a car topped 11 years in the U.S., a situation that spurred people to trade in old vehicles. Banks made that easier by offering low interest rates and greater access to loans, even for buyers with poor credit.

Flint said high gas prices led many people to upgrade from the "big, lumbering, old SUV that got 15 miles per gallon" to a newer, more efficient vehicle, like the Ford Escape SUV, one of the top-selling cars in 2012. It gets 34 miles per gallon on the highway, Flint said.

Even though gas prices are somewhat down, they are still higher than in the past, Flint said, and will likely go back up by the summer. That weighs heavily on the minds of potential car buyers.

"We never heard about (gas mileage) on the sales floor before," Flint said.

Todd Ingersoll, owner of Ingersoll Automotive in Danbury -- which sells Chevrolet, Buick, GMC and Cadillac -- said his dealership enjoyed a good year in 2012.

"The market has come back year after year" since the beginning of the 2008 recession, Ingersoll said, and he expects that upward trend to continue in 2013.

"We will be releasing more new models than we have in any time in company history," he said.

The best part of 2012 came at the end, when special deals on pickup trucks and the usual round of sparkling holiday ads helped December sales jump 9 percent to more than 1.3 million, according to Autodata Corp. That translates to an annual rate of 15.4 million, making December the strongest month of the year.

In 2005, sales were at 17 million. When the economy tanked, sales fell to a 30-year low of 10.4 million in 2009.

Flint said sales are "slowly getting better," but the numbers sold are still a ways off from the record numbers that were sold prior to the crash.

"Back then, we would have said `Oh we're in a recession,' " Flint said.

Volkswagen led all major automakers with sales up a staggering 35 percent, led by the redesigned Passat midsize sedan. VW sold more than five times as many Passats last year as it did in 2011.

Toyota, which has recovered from the earthquake and tsunami in Japan that crimped its factories two years ago, saw sales jump 27 percent for 2012. December sales were up 9 percent. Unlike 2011, the company had plenty of new cars on dealer lots for most of last year.

Honda sales rose 24 percent for the year. Nissan and Infiniti sales were up nearly 10 percent as the Nissan brand topped 1 million in annual sales for the first time. Hyundai sales rose 9 percent for the year to just over 703,000, the Korean automaker's best year in the U.S.

Chrysler, the smallest of the Detroit carmakers, had the best year among U.S. companies. Its sales jumped 21 percent for the year and 10 percent in December. Demand was led by the Jeep Grand Cherokee SUV, Ram pickup and Chrysler 300 luxury sedan.

Ford edged up 5 percent and GM rose only 3.7 percent for the year. For December, Ford was up 2 percent and GM up 5 percent.

At Park City Ford, Flint is optimistic about sales in 2013.

"We're extremely bullish on this year," Flint said.

In Danbury, Ingersoll said the new interest in American cars has come about because the products are better.

"You can no longer say we're behind in design, in quality, in gas mileage," he said. "Those days are over."

"2013 isn't going to be a good year for us,'' Ingersoll said. "It's going to be a great year.''

Flint said the "only wildcard" is whether tax rates go up, leading to less spending by Americans.

Ford's chief economist, Ellen Hughes-Cromwick said her company is concerned about an increase in the payroll tax, which is scheduled to climb to 6.2 percent this year from 4.2 percent in 2011 and 2012. That amounts to a $1,000 to $1,500 tax increase per household, she said.

"We will look at that closely because it will crimp spending in the months ahead," she said.

The Polk auto research firm predicted even stronger U.S. sales for 2013, forecasting 15.3 million vehicle sales as the economy continues to improve. Polk, based in Southfield, Mich., expects 43 new models to be introduced, up 50 percent from last year. New models usually boost sales.

The firm also predicts a rebound in sales of large pickups and midsize cars. All eight of the top manufacturers are introducing new vehicles, and that should bring competition and lower prices in those segments, according to Tom Libby, lead North American analyst for Polk.

But the firm's optimistic forecasts hinge on Washington reaching an agreement on government debt limits and spending cuts.